The State of Bitcoin in Asia: The Appeal and the Risk

An Increase in Bitcoin Investments

Japan and South Korea are currently in a state of nationally LOW saving rates, and as a result, residents are turning to bitcoin, and increasing their investments. In fact, throughout the month of May, BTC saw a 60% increase. Additionally, Asian stocks saw a 17% gain, in comparison with a 124% increase in cryptocurrency, both in 2017. Much of this year’s investments are believed to be a contributing factor in increased bitcoin flow for the year, thus far.

In just the last two weeks, two countries in Asia have reported an increased interest in cryptocurrency. This is perhaps due to Japan’s recently accepted bill, which addresses the idea of acknowledging bitcoin and other digital currency as real money. With firm money laundering regulations across the continent, BTC trades at a quality rate in both Japan and South Korea. For example, it traded for $3,800 in South Korea on May 25th, when the worldwide average bitcoin price stood at $2,514.

Japanese social insurance and labor consultant, Mutsuko Higo, who recently purchased nearly 200,000 yen in bitcoins, commented, “After I first heard about the bitcoin scheme, I was so excited I couldn’t sleep. It’s like buying a dream. Everyone says we can’t rely on Japanese pensions anymore. This worries me, so I started bitcoins.”

What’s the Risk?

Despite the sudden surge in bitcoin, there is some risk involved with trading, due to the digital currency being generally unregulated in Asia. Additionally, the recent growth will inevitably attract scammers, attempting to move in via pyramid schemes, one of which South Korea has already busted.

President of the Bitcoin Association in Hong Kong, Leonhard Weese, forewarns bitcoin investors: “Trading carries huge risk: there is no investor protection and plenty of market manipulation and insider trading. Some of the exchanges cannot be trusted in my opinion.”

While some of the larger exchanges have applied safety procedures, some of the smaller ones are lacking the necessary security. According to a Financial Services Agency (FSA) official, “The government is not guaranteeing the value of cryptocurrencies. We are asking for bitcoin exchanges to fully explain the risk of sharp price moves.”

Source:

“Japan And South Korea To Invest More In Bitcoin”,cryptocoinsnews.com, June 4, 2017.